l\epublic of tbe f bilippine~

i>upreme (ourt
~anila

FIRST DIVISION

DEPARTMENT OF LABOR and G.R. No. 233781

EMPLOYMENT (DOLE),
Petitioner, Present:

BERSAMIN, C.J.,
- versus - DEL CASTILLO,
JARDELEZA,
GESMUNDO, and
KENTEX MANUFACTURING CARANDANG, JJ.
CORPORATION and ONG
KING GUAN, Promulgated:
Respondents. JUL O8 2019
X - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -,

DECISION

DEL CASTILLO, J.:

Petitioner Department of Labor and Employment (DOLE) filed this

Rule 45 Petition 1 assailing the March 27, 2017 Decision 2 of the Court of
Appeals (CA) in CA-GR SP No. 141606 discharging respondent Ong King
Guan (Ong), a corporate officer of Kentex Manufacturing Corporation
(Kentex), from being personally and solidarily liable with Kentex for the
monetary awards specified in the June 26, 2015 Order 3 rendered by the
DOLE-National Capital Region (DOLE-NCR) in NCROO-TSSD-1505-
OSHI-001.4

The Facts

Records show that, on May 13, 2015, a fire broke out in the factory
located in Valenzuela City owned by Kentex. The fire claimed 72 lives ~~~
injured a number of workers. As part of its standard procedures, personne/., __
A
1
Rollo, pp. 10-27.
2
Id. at 30-50: penned by Associate Justice Elihu A. Ybanez and concurred in by Associate Justices
Magdangal M. De Leon and Carmelita Salandanan Manahan.
3
Id. at 62-102; penned by Regional Director Alex V. Avila.
4 In the Matter of the General Labor Standards and Occupational Safety and Health Investigation at Kentex
Manufacturing Corporation located at No. 6159 Tatalon Street, Brgy. Ugong, Mapulang Lupa,
Valenzuela City.
Decision 2 G.R. No. 233781

the ·DOLE Caloocan, Malabon, Navotas and Valenzuela (DOLE-

CAMANAVA) Field Office went to Kentex's premises. 5 For its part, the
DOLE-NCR also assessed6 Kentex's compliance with the occupational health
and safety standards.

In the course of the investigation, it was discovered that Kentex had

contracted with CJC Manpower Services (CJC) for the deployment of
workers. The DOLE-NCR directed Kentex and CJC to attend the mandatory
conference set on May 18 and 20, 2015 at the DOLE-NCR Office in Malate,
Manila. Notably, Kentex, its Chairman and Chief Executive Officer Beato
Ang, and the corporation's Chief Finance Officer Ong, were made parties to
this case before the DOLE-NCR.

In the meantime, on May 15, 2015, the DOLE Regional Office No. III
(DOLE-RO III) conducted its own Joint Assessment7 ofCJC. The DOLE-RO
III discovered that CJC, which deployed workers to Kentex, was an
unregistered private recruitment and placement agency. Moreover, it noted
that CJC was non-compliant with the occupational health and safety standards
as well as with labor standards, such as underpayment of wages and
nonpayment of statutory benefits. 8 As a result of these findings, the DOLE-
RO III issued a June 8, 2015 Compliance Order9 which ~tf;cti,%declared
CJC as a labor-only contractor with Kentex as its principa/v -,

5
While they were not able to interview Kentex representatives and workers, the team noted the following:
I) two plant ingresses were available; 2) the foul smell of burnt rubber materials was still present in the
surrounding area, which was still cordoned by the police; 3) the whole plant structure appeared as a
warehouse outside, where vents are only visible on the walls at the upper section of the structure, which
was considered to be the second floor of the whole facility; 4) grilled windows were at the second floor;
and 5) the ground floor where the administrative office was once located was also destroyed. Rollo, pp.
31-32.
6
No. NCR00-TSSD-1505-OSHI-001.
7
Case No. R003-JA-2015-05-002-6; id. at 32.
8
The following deficiencies are as follows: On general labor standards: I) Underpayment of minimum
wage under Wage Order No. NCR-18 and Wage Order No. NCR-19 from date of employment to present;
2) Non-payment of COLA under Wage Order No. NCR-18 and Wage Order No. NCR-19; 3) Non-
payment of 13 th month pay for the year 2014; 4) Non-payment of holiday pay and special holiday
premium; 5) Illegal deduction of cash bond (Php I 00.00 per week); 6) Non-membership of workers and
therefore non-remittance of premiums to SSS, PhilHealth, and PAGIBIG Fund despite deductions on pay;
7) CJC Manpower Services is not registered as contractor/subcontractor under Department Order (D.O.)
No. 18-A in Region III; 8) There is no written service agreement between KMC and CJC Manpower
Services; and 9) There is no employment contract between CJC Manpower Services and workers
deployed at Kentex. On occupational safety and health standards: 1) Non-registration under Rule 1020;
2) Non-submission of annual work accident/illness exposure data report; 3) Non-submission of annual
medical report; 4) No company policy and program on anti-sexual harassment, drug-free workplace,
tuberculosis, hepatitis B, and HIV-AIDS; id at 32-33.
9
Rollo, pp. 54-56.
10
Both Kentex and CJC were ordered to pay jointly and severally the total monetary deficiencies of
Php8,389,655.70 to 99 workers; id. at 56.
 Decision 3 G.R. No. 233781

Meanwhile, during the mandatory conference set by the DOLE-NCR,

CJC's representatives admitted that there was no service contract between
CJC and Kentex; that CJC had deployed 99 workers at the Kentex factory on
the day of the unfortunate incident; that there were no employment contracts
between CJC and the workers; that a CJC representative was sent once a week
to Kentex only to check on the workers' daily time records; that Kentex
remitted to CJC the wage of Php230.00/day for each of the deployed workers
from which amount CJC deducted administrative costs and other statutory
contributions, leaving each worker a mere wage of Php202.50 a day.

Kentex and its corporate officers, through counsel, refuted CJC's

claims. They alleged that CJC 's workers were originally engaged by Panday
Management and Labor Consultancy which CJC later absorbed; and that the
workers' wages ranged from Php250.00 to Php350.00/day on top of CJC's
wage of, more or less, Php202/day. They contended that while the
corporate/business and employment records had all been gutted by fire,
Kentex nevertheless complied with the labor standards particularly on the
minimum wage requirement and with the occupational health and safety
standards, as evidenced by a Certificate of Compliance (COC) signed by the
DOLE-NCR Regional Director Alex Avila (Avila).

The DOLE-NCR's Orders

In a June 26, 2015 Order, 11 the DOLE-NCR rejected the

aforementioned arguments of Kentex. It declared that Kentex could not
invoke the COC because this only attested to the findings of the compliance
officer at the time of the assessment/inspection, even as Kentex was duty-
bound to observe continuing compliance with the labor standards as well as
the occupational health and safety standards. Like the June 8, 2015
Compliance Order of the DOLE-RO III, the DOLE-NCR also found that CJC
was a mere labor-only contractor considering that it was unregistered with the
DOLE Regional Office where it operated. 12 The DOLE-NCR likewise f o ~

11
Rollo, pp. 62-102.
12
In violation of Section 14 of Department Order No. 18-A Series of201 l:
Section 14. Mandatory Registration and Registry of Legitimate Contractors. Consistent
with the authority of the Secretary of Labor and Employment to restrict or prohibit the contracting
out oflabor to protect the rights of workers, it shall be mandatory for all persons or entities, including
cooperatives, acting as contractors to register with the Regional Office of the Department of Labor
and Employment (DOLE) where it principally operates.
Failure to register shall give rise to the presumption that the contractor is engaged in labor-
only contracting.
Accordingly, the registration system governing contracting arrangements and implemented by
the Regional Offices of the DOLE is hereby established, with the Bureau of Working Conditions
(BWC) as the central registry.
 Decision 4 G.R. No. 233781

that the workers were underpaid, 13 and computed the monetary claims due
them. It concluded, thus -

WHEREFORE, premises considered, Kentex Manufacturing

Corporation and/or Beato C. Ang and/or Ong King Guan is/are hereby
ordered to pay within ten (10) days from receipt hereof, Louie Andaya and
56 other similarly situated employees an aggregate amount of One Million
Four Hundred Forty Thousand Six Hundred Forty-One Pesos and Thirty-
Nine Centavos (Pl,440,641.39). Failure to pay said workers within ten (10)
days from receipt hereof shall cause the imposition of the penalty of double
indemnity pursuant to Republic Act No. 8188 otherwise known as 'An Act
Increasing the Penalty and Imposing Double Indemnity for Violation of the
Prescribed Increase or Adjustment in the Wage Rates.'

SO ORDERED. 14

On July 3, 2015, only Ong moved for reconsideration of the foregoing

15
order. However, in a letter dated July 7, 2015, 16 DOLE-NCR Regional
Director Avila explained that Ong's motion for reconsideration was not the
proper remedy. Instead, an appeal to the DOLE Secretary should have been
made within 10 days from receipt of the Order pursuant to Section 1, Rule 11
of Department Order No. 131, Series of 2013. Moreover, since Ong received
the June 26, 2015 Order on the same day, he had only until July 6, 2015 within
which to appeal to the DOLE Secretary. However, Ong never did; thus, the
Compliance Order had attained finality.

After this, Kentex and Ong filed with the CA a Rule 43 Petition 17
assailing the (1) June 8, 2015 Compliance Order; (2) the June 26, 2015 Order;
and (3) the July 7, 2015 letter of the DOLE-NCR Regional Director. Among
the errors Kentex and Ong assigned was the DOLE-NCR's finding that Ong
was solidarily liable with Kentex for the monetary awards due the workers.

Ruling of the Court ofAppeals

Although the CA ruled on the merits of the case and upheld the a s s a i l ~

13
The computations were for the underpayment of basic wages, premium pay on rest days, COLA, wages
on holidays, overtime pay, night shift differential, 13 th month, and the unauthorized deduction of the cash
bond.
14
Rollo, p. l 02.
15
Id. at 103-113.
16
ld.atll4-115.
17
Id. at 116-136.
 Decision 5 G.R. No. 233781

Orders and letter of the DOLE-NCR Regional Director, 18 it observed at the

outset that Kentex and Ong resorted to the wrong remedy in filing a Rule 43
Petition, when the proper remedy should have been a Rule 65 certiorari
petition from the decisions/resolutions of the DOLE Secretary. In fact,
nothing from the assailed documents indicative of acts of grave abuse of
discretion amounting to lack or excess of jurisdiction on the part of the DOLE
Secretary was set forth or amply demonstrated. And given the fact that time
had irretrievably lapsed without any appeal being availed of by Kentex and
Ong as prescribed by the procedural rules on labor laws, 19 the CA ruled that
the assailed orders had become final and executory.

Anent the particular issue involving Ong, the CA took the view that,
as a company officer, he could not be personally held liable for the debts of
Kentex without a showing of bad faith or wrongdoing on his part for the
corporation's unlawful act. 20 The CA opined that nothing from the DOLE-
NCR' s June 26, 2015 Order discussed any act of Ong that showed his
involvement in the wrongdoing of Kentex. Thus, the dispositive portion of
the CA judgment stated:

FOR THESE REASONS, the Order, dated June 26, 2015, of the
DOLE-National Capital Region in Case No. NCR00-TSSD-1505-OSHI-
001, is AFFIRMED with the MODIFICATION that petitioner Ong King
Guan is held not liable for the monetary awards specified in the Order. The
Order, dated June 8, 2015 of the DOLE-Regional Office No. III, San
Fernando City, Pampanga, in Case No. R003-JA-2015-05-002-6 and the
Order/Letter, dated July 7, 2015, of DOLE-NCR Regional Director Alex V.
Avila, are AFFIRMED.

SO ORDERED. 21

the CA
Petition.
?
Petitioner filed a Motion for Partial Reconsideration22 to set aside the
release or discharge of Ong from liability to pay the monetary awards. But
motion in its August 22, 2017 Resolution. 23 Hence, this

18
Id. at 30-50.
19
N.B. The CA cited Rule XV, Section 1 ofD.0. No. 131-B, Series of 2016, i.e., the "Revised Rules on
Labor Laws Compliance System," which echoes the same provision cited by the DOLE Regional Director
in his July 7, 2015 letter that cited Rule 11, Section I of D.O. 131-13, Series of 2013.
20
Citing Section 31 of the Corporation Code- Liability of Directors, Trustees or Officers. - Directors or
trustees who willfully and knowingly vote for or assent to patently unlawful acts of the corporation or
who are guilty of gross negligence or bad faith in directing the affairs of the corporation x x x shall be
liable jointly and severally for all damages resulting therefrom suffered by the corporation, its
stockholders or members and other persons.
21
Rollo, pp. 49-50.
22
Id. at 137-141.
23
Id. at 52-53.
 Decision 6 G.R. No. 233781

The Arguments

Petitioner contends that the CA erred in releasing or discharging Ong

from liability. It argues that, since the June 26, 2015 DOLE-NCR Order had
already become final and executory, there being no appeal made or perfected
from said order to the DOLE Secretary, the CA could no longer alter the
subject Order.

Respondents Kentex and Ong counter that the CA Decision correctly

released or discharged Ong from monetary liability because a corporate
officer has a juridical personality entirely separate and distinct from the
corporation. They moreover claim that the DOLE-NCR Order was a void
judgment because they were deprived of due process; they assert that they
could not expect a fair decision if they appealed because the then DOLE
Secretary 24 had previously announced that cases would be filed against
Kentex, an announcement that was clearly designed for media consumption
and to gain publicity mileage.

Our Ruling

We agree with petitioner.

Both the DOLE-NCR and the CA correctly ruled that the June 26, 2015
Order had already become final and executory in view of the failure of
respondents Kentex and Ong to appeal therefrom to the Secretary of Labor.
Notice ought to be taken of the fact that, at the time the DOLE-NCR rendered
its ruling, Department Order No. 131-13 Series of 2013 25 was the applicable
rule of procedure. The pertinent provision states:

Rule 11, Section 1. Appeal. - The Compliance Order may be

appealed to the Office of the Secretary of Labor and Employment by filing
a Memorandum of Appeal, furnishing the other party with a copy of the
same, within ten (10) days from receipt thereof. No further motion for
extension of time shall be entertained.

A mere notice of appeal shall not stop the running of the period
within which to file an a p p e a ~

24
The then DOLE Secretary was Rosalinda Baldoz.
25
Entitled "Rules on Labor Laws Compliance System".
 Decision 7 G.R. No. 233781

Here, instead of filing an appeal with the DOLE Secretary, Ong moved
for a reconsideration of the subject Order; needless to say, this did not halt or
stop the running of the period to elevate the matter to the DOLE Secretary.
Indeed, the DOLE-NCR took no action at all on Ong's motion for
reconsideration; in fact, it categorically informed Ong that his resort to the
filing of a motion for reconsideration was procedurally infirm. The June 26,
2015 Order having become final, it could no longer be altered or modified by
discharging or releasing Ong from his accountability.

Anent respondents' allegation regarding the DOLE Secretary's

partiality, this Court agrees with the CA, that-

[Kentex and Ong King Guan's] contention that the Secretary has
already prejudged their liability in her pronouncements before the media,
such that an appeal to her would be an exercise in futility, is untenable. We
have the rules. And, as heretofore stated, failure to conform to the rules
regarding appeal will render the judgment final and executory. True,
litigation is not a game of technicalities. It is equally true, however, that
every case must be presented in accordance with the prescribed procedure
to ensure an orderly and speedy administration of justice. The failure,
therefore, of petitioners to comply with the settled procedural rules justifies
the dismissal of the present petition. 26

Neither was there merit in respondents' claim that they had been denied
or deprived of due process. The facts clearly disclose that they had
substantially participated in the proceedings before the DOLE-NCR from the
mandatory conference up to the filing of a position paper where their side was
sufficiently heard. It is axiomatic that "[t]he observance of fairness in the
conduct of any investigation is at the very heart of procedural due process.
The essence of due process is to be heard, and, as applied to administrative
proceedings, this means a fair and reasonable opportunity to explain one's
side, or an opportunity to seek a reconsideration of the action or ruling
complained of." 27

Thus, it is self-evident that the CA committed serious error when it

ordered the discharge or release of Ong from the obligations of Kentex. The
reason is elemental in its simplicity: contrary to settled, unrelenting
jurisprudence, it unconsciously and egregiously sought to alter and modify, as
indeed it altered and modified, an already final and etecu,~erdict. We
have already declared in Mocorro, Jr. v. Ramirei'- 8 t h /V <7
26 Rollo, p. 44.
27
Vivo v. Philippine Amusement and Gaming Corporation, 721 Phil. 34, 39 (2013).
28
582 Phil. 357 (2008).
 Decision 8 G.R. No. 233781

x x x A definitive final judgment, however erroneous, is no longer subject

to change or revision.

A decision that has acquired finality becomes immutable and

unalterable. This quality of immutability precludes the modification of a
final judgment, even if the modification is meant to correct erroneous
conclusions of fact and law. And this postulate holds true whether the
modification is made by the court that rendered it or by the highest court in
the land. The orderly administration of justice requires that, at the risk of
occasional errors, the judgments/resolutions of a court must reach a point of
finality set by the law. The noble purpose is to write finis to dispute once
and for all. This is a fundamental principle in our justice system, without
which there would be no end to litigations. Utmost respect and adherence
to this principle must always be maintained by those who exercise the power
of adjudication. Any act, which violates such principle, must immediately
be struck down. Indeed, the principle of conclusiveness of prior
adjudications is not confined in its operation to the judgments of what are
ordinarily known as courts, but extends to all bodies upon which judicial
powers had been conferred.

The only exceptions to the rule on the immutability of final

judgments are ( 1) the correction of clerical errors, (2) the so-called nunc pro
tune entries which cause no prejudice to any party, and (3) void judgments.
XX x29

In the absence of any showing that the CA's modification or alteration

of the subject Order falls within the exceptions to the rule on the immutability
of final judgments, the DOLE-NCR's June 26, 2015 Order must be upheld
and respected.

WHEREFORE, the Petition is hereby GRANTED. The Court of

Appeals' Decision dated March 27, 2017 insofar as it holds respondent Ong
King Guan not liable for the monetary awards specified in the June 26, 2015
Order is hereby REVERSED and SET ASIDE. The June 26, 2015 Order of
the Department of Labor and Employment, National Capital Region, finding
respondent Ong King Guan solidarily liable to pay the employees named in
the Order the amount of Phpl,440,641.39 is hereby REINSTATED.

Costs against responden~

29
Id. at 366-367.
Decision 9 G.R. No. 233781

SO ORDERED.

Associate Justice

WE CONCUR:

Associate Justice

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, I certify that

the conclusions in the above Decision had been reached in consultation before
the case was assigned to the writer of the opinion of the Court's Division.